Rise in 50+ tenants

The latest stats from the UK's largest agent Countrywide reveals an interesting trend.

Their report shows there has been a 7% decline in the number of under 25 year old tenants.  Understandable given the current poor work prospects for the under 25 and rising university tuition fees.  All this means stopping at home with mum and dad for longer not only makes financial sense but is a financial imperative for many young people.

Older tenants on the rise

On the other hand there appears to have been a significant increase in the number of tenants over the age of fifty with the report showing a 6% annual rise. Again, this probably is not surprising.  The difficulty in obtaining mortgage finance and the continued break up of marriages means that renting privately is often the best option for older people finding themselves single after a lifetime of family living.

Our aging population (over 50% increase in over 65s expected from 2010 to 2030) will produce big opportunities I'm sure for private landlords.  How we target and capitalise on this opportunity I'm not completely clear.  Do we all rush out and invest in small bungalows.  Do we take the McCarthy and Stone approach and invest in flats in suburban areas with good access to local facilities?

It's an interesting time for landlords who have traditionally targeted the young professional as one of their key client groups.  Clearly I would say that this trend is not likely to be temporary and reverse any time soon.  So should landlords be repositioning their investment portfolios to embrace our aging population?  Thoughts please.

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National rent index reveals massive falls

Property Hawk has been campaigning for a reliable rental index for some time.

Finally, the ONS has responded.  However, unfortunately they don't seem to be keen on putting actual rental data online.  The ONS’s Index of Private Housing Rental Prices (IPHRP) is described as “experimental”.  The first index showed that rents have risen by 1.3% nationally over the last year.

Long term rental increase masks 'real' fall in rents

Most interestingly from my point of view was the long term data which showed that nationally rents only rose by 8.4% in England during the 8 years from May 2005 to 2013. In London during this time things have been slightly better with rental increases of 11.0%.  Whilst in the North-East 5.2% and the East Midlands 5.3% rental increases have been pretty negligible.

The interesting thing for landlords is that if we take the national increase in rents of less than 1% per year this is considerably below the rate of inflation.  The rate of increase of inflation during the same period was a total of 30% or 3.4% per annum.  In other words rents would have had to risen by 30% not 8.4% just to have stayed the same in real terms.

This means two things:

1. Landlords have suffered a massive real term rental fall.  Completely the opposite to what the headlines have been shouting about.
2. Tenants who have been complaining about surging rents have actually been watching the real costs of their rents fall consistently over the last 8 years.

For all those talking about a buy-to-let boom the rental data seems to be painting a slightly contrary picture.

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A list of landlord regulations

The Telegraph list some of the many regulations that are plaguing landlords

Read the Telegraph post here

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New coin meter for landlords

We have some strange requests running Property Hawk.  From the sublime to the down right quirky!  So the latest weird and wonderful request is from a business based down in Devon.

This British business manufactures coin meters.  A blast from the past?  Their press release suggests that this is not just any old coin meter it takes £1 and £2 coins and everything!  My main reason of featuring this company is it's called Westwood Meters & Timers Ltd.  Westwood is the surname of one of my oldest friends who's mum recently passed.  RIP Mrs Westwood a lovely lady!

For those landlords that may have an interest in coin meters (not my bag).  You can check out their website.

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Think tank propose a raft of changes to PRS

The left wing think tank The Strategic Society have criticised the growth of the Private Rented Sector. In their latest report they conclude the Private Rented Sector facilitates a transfer of wealth from the poorer group (tenants) to a richer group (landlords), and undermines social mobility.

Saying PRS has a harmful effect on equality and social mobility across all of society for the benefit of the 2% of the population who are landlords. 

The report comes lists a number of proposals as regards changes in tenants rights and responsibilities including -

• the tightening of tenancy rights, 
• lengthening of tenancy contract periods, 
• the linking of rent increases to a CPI index, 
• the right for tenants to decorate a property.
• allow tenants a two month notice period to end a tenancy.

They conclude that whatever changes in regulations were to be made would scare few Private landlords away from the sector, who they describe as 'financially secure, are not struggling to make ends meet and are strongly attached to letting as an investment activity, so policymakers should feel confident to improve the position of private tenants in relation to their rights and responsibilities.'

They also make proposals to prevent landlords from capitalising on the new build property market -

• Produce bi-yearly data on what proportion of new-build homes are being sold into the PRS; 
• Prevent the purchase of new-build homes with buy-to-let mortgages for the foreseeable future; 
• Implement a ‘three-year rule’, such that short-term tenancy agreements cannot be drawn up in relation to homes that are less than three years old; 
• Implement a ‘buy-to-let lending cap’ on the proportion of mortgage lending by banks that can be distributed as buy-to-let mortgages for purchasing owner-occupied housing; 
• Review the wider financial incentives and investment returns available to private landlords via the rental sector.

Their proposals to halt the impact of PRS are to 'take aggressive steps to broaden home- ownership'.

• Build more homes – to bring down the cost of renting and home-ownership; 
• Shared-ownership schemes – to allow tenants with smaller deposits and lower-incomes to get on to the ‘property ladder’;
• ‘Shared equity for tenants’ – the government to give tenants the opportunity to gain partial ownership of the homes they rent, for example, preferential share rights for tenants of institutional ‘build-to-let’ developments; 
• Regulate rental prices in the PRS – given that high rental and property prices are the result of market failure in UK housing supply – itself the result of political choices - there may be arguments for policymakers to review how private rent prices are determined in the PRS. 

Download the full report from The Strategic Society

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Are you above or below average?

The average private landlord owns a property portfolio of £670,127 including the value of their home. After taking out mortgage debts landlords are left with an average property wealth of £479,598.

The figures come from the Wealth and Assets Survey (WAS)    

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